LexM/S. BINANI COMMERCIAL CO., LTD versus RAMANLAL, MAGANLAL MEHTA
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
z961
fl.Jay r.
626
SUPREME COURT REPORTS
[1962]
M/s. BINANI COMMERCIAL 00., LTD.
v.
RAMANLAL, MAGANLAL MEHTA
(P. B. GAJENDRAGADKAR and K. N. WANCHOO, JJ.)
Control of ,supply-Non-ferrous metals-Statute cmpoweri11g
Government to fix maximum quantity that may be sold-Notification
fixing rnch maximum-Validity of-Agreement to sell more tha11
maximum quantity fixed-If void-Supply and Prices of Goods Act,
r950 (70 of r950), ss. 4 and 5-Government of India Notification
dated September 2, r950.
The Supply and Prices of Goods Act, 1950, made provisions
for the control of prices, supply and distribution of certain goods
essential to the national economy. Section 4(1 )(c) empowers the
Central Government to fix the maximum quantity of such goods
which may be sold to any person in one transaction. Sec-
tion 4(2)(a) provides that the maximum quantities may be fixed
for the same goods differently in different localities or for differ-
ent classes of dealers or producers. Section 5(r)(c) provid,•s that
no dealer or producer shall sell or agree to sell or offer for sale
goods exceeding the maximum fixed under s. 4.
The Central
Government issued a notification prohibiting dealers and procin-
cers from selling any non-ferrous metal exceeding one ton except
upon a declaration by the purchaser that the quantity did not
exceed his requirements for three months. The appellant en-
tered into an agreement to sell to the respondent 300 tons of
zinc. The respondent did not take the entire quantity and the
appellant filed a suit for damages for breach of contract. The
respondent resisted the suit on the ground that the agreement
was void as it offended s. 5(1)(c) of the Act. The appellant con-
tended that the notification was invalid as only an immutable
arithmetical maximum could have been fixed for each non-fer-
rous metal but the notification did not do so and also as it die!
not fix the maximum by reference to different classes of deale1s
and producers according to s. 4(2)(a). It was further contendecl
that the notification applied only to a sale and not to an agree-
ment to sell and as such the agreement did not offends. 5(r)(c'.
Held, that the notification was perfectly valid and that t e
agreement was void as it offended s. s(r)(c) of the Act. Sec-
tion 4(1)(c) did not require the fixing of an immutable arith-
metical maximum as a large number of goods were intended to be
covered by the Act which would be required by different clas;es
of persons under a variety of circumstances. Section 4(2){a)
was merely an enabling provision and did not oblige the
Government to fix the maximum differently for different classes
of dealers and producers; s. 4(2)(a) was not a proviso to s. 4(1)(c).
Once the maximum was fixed, then by the combined operatiJn
of s. 4(r)(c) and s. 5(1)(c) an agreement to sell or an offer to sell
such goods in excess of the maximum was immediately hit.
2 S.C.R. SUPRE:MEl COURT REPORTS
627
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
371of1957.
Binani Commdr~
cial Co., Ltd.
v.
Appeal from the judgment and decree dated August
22, 1955, of the Bombay High Court in Appeal No. 49
of 1955.
Ramanlal,
JIJoganlal JJehla
0. B. Agarwala, J. R. Dadachanji, Ravinder Narain
and 0. G. Mathur, for the appellant.
Ajit H. Mehta and I. N. Shroff, for the respondent.
1961. May 1. The Judgment of the Court was
delivered by
GAJENDRAGADKAR, J.-This appeal arises from aGaj•ndragadkar ].
suit filed by M/s. Binani Commercial Co. Ltd., on the
Original Side of the Bombay High Court against the
respondent Ramanlal Maganlal Mehta. In its suit the
appellant sought to recover from the respondent a
sum of Rs. 93,053-3-0 which represented the loss
suffered by it in the transaction in question or in the
alternative damages for Rs. 88,229-3-0 for breach of
the con tract in respect of the said transaction.
The appellant is a Limited Company and it carries
on business in Bombay as metal merchants, bankers
and commission agents. The respondent also carries
on business in Bombay under the name and style of
M/s. Balasinor Export and Import Co., and also as
M/s. Ramanlal and Sons. In January 1952 the appel-
lant agreed to sell to the respondent 300 tons of Elec-
trolytic Zinc at the rate of Rs. 171 per cwt. against
delivery orders issued under the regulations of the
Metal Traders Association, Ltd., for Posh Sudi 15
delivery (January 12, 1952). The respondent promis-
ed to pay for the said Excerpt shown. Read the full judgment & AI analysis in Lexace.